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A consumer and environmental advocacy group reiterated its opposition to the proposed sale of Cleco Corp. at a meeting Wednesday in Alexandria, charging that the deal is bad for customers and is being driven to enrich the company's current management.

The Alliance for Affordable Energy, which positions itself as "both a consumer watchdog and environmental advocacy organization," is encouraging people to contact the Public Service Commission members who will decide early next year whether to approve the sale of Pineville-based Cleco.

"This deal is benefiting shareholders and board members," said Casey DeMoss, the alliance's CEO. "We would like to see a deal that centers around the customers who are already paying the highest rates in the state."

Cleco agreed last October to a sale proposal for nearly $5 billion from an investment group led by Macquarie Infrastructure and Real Assets and British Columbia Investment Management Corporation, together with John Hancock Financial.

The sale has received other regulatory clearance and was approved by Cleco stockholders in February, leaving PSC approval as the last significant hurdle before the deal can be closed.

Casey DeMoss, CEO of the Alliance for Affordable Energy, speaks about the proposed sale of Cleco Corp. Wednesday.(Photo: Jeff Matthews/The Town Talk)

The alliance and others have expressed concern over the amount of debt Cleco is taking on to finance the sale. In addition to $1.35 billion in assumed debt, the buyers are proposing using $1.35 billion in new debt as part of the sale.

"Among all the other issues, the debt is the most threatening," DeMoss said.

DeMoss also charged Cleco's current board of hiring CEO Bruce Williamson "for the sole purpose of selling the company. That's his history as a CEO."

When Williamson was chief executive at Dynegy, a deal to sell the Houston-based power company to private hands fell apart, reportedly over compensation that was to be paid to its top executives. Under change of control agreements, Williamson and other board members and executives would be paid millions in cash, stock and benefits if Cleco is sold.

In a statement, Cleco denied Williamson was hired to explore a sale.

"The board had no specific transaction or plan in hiring Mr. Williamson in April 2011 other than to hire an experienced energy executive to lead a number of initiatives inside the company," the statement read. "It was later that Cleco's board received indications of interest and out of a fiduciary responsibility our board and management conducted a review and determined the offer from the Macquarie-led group was and is in the best interest of Cleco's shareholders and the company as a whole, including customers, employees, retirees and communities."

Supporters of the sale say it offers stability because of promises the prospective new owners have made, including keeping Cleco headquartered in Pineville, maintaining employees and benefits, continuing charitable and economic development contributions, and extending service commitments. The new owners have also pledged to pay out $65 million in customer rate credits over 10 years.

Opponents aren't buying it. They say the debt issue still exposes rate payers to major risk, no matter how insulated the actual utility is promised to be. They also worry about what happens to Cleco years down the road, particularly when Macquarie looks to sell its stake.

"It's hard for people to understand the Public Service Commission and regulation," DeMoss said. "But this deal will affect everyone. Energy is such a big part of our lives. It's essential to our life and liberty. ... There have been successful mergers in the state before, but we don't believe this one is the right deal for Cleco customers."

The full report DeMoss presented Wednesday, "Cleco Takeover: The High Cost of a Bad Deal," can be viewed at here. The alliance's previously released report, "Our Cleco, Our Community: Louisiana's Utility in Peril," can be found here

More information on the proposed sale, including testimony by Public Service Commission staff and other parties, as well as a summary of promised commitments, can be found at www.cleco.com/agreement.

A hearing begins next month before an administrative law judge, who will give an opinion to the PSC. Commissioners are expected to vote on the sale in January or February.